Building a Model for Your Agency, With Carson Pierce

The Agency Profit Podcast

Points of Interest

• 00:51 – 01:14 – Meet Today’s Guest: Carson Pierce: Carson, a fan favorite at Parakeeto, joins the show to discuss a key challenge for agency owners—transitioning from expert to CEO while managing financial complexities.
• 02:01 – 03:10 – The Common Agency Struggle: Many agency owners are incredible at their craft but struggle with the financial side of running a business, leading to inefficiencies and profit loss.
• 05:01 – 06:40 – The Knowledge Gap in the Agency World: Historically, there hasn’t been much comprehensive content available to help agency owners understand the financials of their business, making it difficult to navigate profitability challenges.
• 09:01 – 11:00 – Breaking Down Agency Finances: Marcel and Carson introduce a simple but effective model that helps agencies determine whether they are set up for financial success or destined to struggle.
• 11:01 – 13:30 – Understanding the Delivery Margin: Why agency profitability is largely determined by how efficiently they deliver client work and how much of every earned dollar is left after delivery costs.
• 16:01 – 18:40 – The Impact of Small Pricing Adjustments: A 10% drop in billable rates can significantly affect profitability—why agencies must be intentional about pricing and scope.
• 18:41 – 21:00 – The Payroll Grid: Your Agency’s Financial Roadmap: How to break down staff costs, expected billable hours, and rates to create a clear financial model for your agency.
• 21:01 – 24:00 – Expense Allocation & Overhead Costs: Understanding where your money is going and ensuring overhead stays in check without cutting the things that drive business growth.
• 24:01 – 27:30 – Profitability Benchmarks & The 50/30/20 Rule: The ideal breakdown for agency spending—50% on delivery, 30% on overhead, and 20%+ in profit—and why most agencies don’t hit these targets.
• 27:31 – 30:00 – The Dangers of Underpricing & Low Utilization: Why agencies that don’t charge enough or struggle to keep their teams busy end up running on razor-thin margins (or even losing money).
• 32:41 – 35:10 – Why Agency Owners Must Know Their Numbers: Financial clarity leads to better decisions—knowing what’s working and what’s not is the key to running a sustainable agency.

Show Notes

• Connect with Carson via LinkedIn
• Get access to this model tool in the toolkit
• Parakeeto Foundations Course
  
• Books Mentioned:
  • Digital Dollars and Cents
  • Financial Management of a Marketing Firm
  • Software as a Science

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